House prices have shot up to their highest on record thanks to ‘steroid’ injections in the mortgage market, it was reported this morning.
The LSL/Acadametrics survey says house prices are now higher than at their previous peak of February 2008 and are £6,125 higher than a year ago at £233,061.
Reporting for May, the survey also says that sales are up 10,000 year on year, and up 19% on April.
However, it is also clear that it is the London market that is driving the increase, with northern regions still struggling.
David Brown, commercial director of LSL Property Services, said: “House prices rose in May to the highest on record.
“Even taking inflation into account, the record high price is symbolic of the significant improvement in the housing market over the past year.
“An abundance of great mortgage deals are on offer and schemes like Help to Buy and Funding for Lending have acted like a steroid injection for the mortgage market and made it markedly stronger than last year.
“But it is not quite as good as it looks.
“Take London out of the equation and the average price falls dramatically.
“The red hot London market is giving the property market as a whole a deceptively rosy glow.”
He said the North-South divide is becoming more prominent. In the North, house prices are 11.3% off their March 2008 peak, and in Wales are 10.8% off their October 2007 peak.
The LSL/Acadametrics house price is significantly at odds with prices currently quoted by Nationwide, Halifax and the Land Registry, but is relatively in line with ONS prices and the asking prices quoted on Rightmove. It is also in line with the asking price of £240,238 currently quoted for June by the property search engine Home.